UPDATE 1-Lithia posts quarterly loss amid revenue decline

DETROIT, April 29 (Reuters) - Car retailer Lithia Motors Inc (LAD.N: Quote, Profile, Research) posted a first-quarter loss on Tuesday amid the slumping U.S. auto market, reporting revenue declines in new and used vehicle sales and financing.

Lithia, the No. 8 U.S. auto retail sales group by volume, reported the loss at a time when other listed dealership groups reported earning more from sales of higher margin used vehicles and vehicle financing.

The car seller said it would continue cost cuts, mainly in personnel and increasing productivity, and maintained its full year earnings forecast.

Lithia reported a net loss of $2.1 million, or 11 cents per share, compared with net income of $7.1 million, or 34 cents per share, a year earlier. Revenue fell 9.7 percent to $699.3 million.

Lithia reported a loss from continuing operations of 3 cents per share when excluding $1.3 million, or 7 cents per share, in expenses to complete an accounting investigation that found isolated problems with minimal financial impact.

Analysts on average expected Lithia to report a loss of 7 cents per share excluding one-time items, according to Reuters Estimates.

New car sales in unit terms fell 19 percent in the first quarter, Lithia said. The decline was more than double the 8 percent sales decrease reported by the U.S. industry overall.

Chrysler LLC's brands represent the largest share of Lithia's sales.

Lithia said its earnings forecast was based on continuing operations and included an expectation for a continued U.S. economic downturn as well as up to 20 cents per share for annual start-up costs for a company initiative.